During early trading on January 28th, both gold and silver prices moved higher, with spot London gold breaking above $5,200 per ounce to set a new record.
Spot silver also gained over 1%, surpassing the $113 mark.
Analyzing the significant surge in gold prices, independent financial commentator Zhao Huan noted that the strategic asset allocation demands from various central banks are the core support for this round of gold's ascent. Furthermore, the Federal Reserve is currently in an interest rate-cutting cycle, which diminishes the attractiveness of holding US dollar-denominated assets and consequently lowers the opportunity cost of holding gold, an asset that yields no interest. Looking ahead, institutions are widely optimistic about the long-term upward trend for gold. In its latest report, Goldman Sachs raised its year-end target price for gold from $4,900 to $5,400 per ounce, citing growing demand from private sector investors and central banks. Analysts at Goldman Sachs project that central banks will purchase 60 tonnes of gold monthly this year, and they anticipate that holdings in gold ETFs will also increase as the Fed cuts rates. Central banks have already begun competing with private sector investors for the limited supply of gold through traditional ETFs. A recent research report from Huaxi Securities predicts that gold price increases by 2026 could fall within a range of 10% to 35%, while Jefferies Group has issued a startling target of $6,600 per ounce.
